A recent stir was created when a Midwestern television company was reported to have signed a contract with a state government agency, promising to market the agency and its programs throughout the state. This promotion was to include a segment in the company’s televised news promoting the effects of the work of the agency. Questions were immediately raised about whether this was prohibited by FCC rules. But, when the news pieces ran, the company was very careful to state after these segments that they were sponsored by the station and the state agency. As the FCC has no rules about what can be included in the "news" (and probably could not consistent with the First Amendment), the only real issue was one of sponsorship identification. As the licensee did here, if the sponsor of the story is identified, making clear to the public who was attempting to persuade them on the issue addressed, there should be no FCC issues.

This is different from the issues that have arisen previously at the FCC, where there have been fines levied against television stations and cable systems for airing programming that was sponsored, but for which no sponsorship identification was provided (see our posts here and here). This includes the video news release or VNR issues, where the FCC has fined stations for using news actualities provided by groups with a financial interest in the issue that was being addressed, but without identifying the fact that the material was provided by the interested parties. Where a program addresses a controversial issue of public importance, the disclosure rules are more strict, requiring that the station not only disclose that it received money to air a story – but to also disclose anything that it got from the interested party – including tapes or scripts.

As we have written, the entire sponsorship identification field is under review in the Commission’s proceeding which is to consider embedded advertising, product placement, and the whole gamut of broadcast sponsorship issues. In that proceeding, the FCC made clear that broadcasters have an obligation to make sure that no one is receiving any undisclosed consideration for the placement of any type of promotion for a good or service into a program. Broadcasters have this obligation, according the FCC, even if the program is being produced by a third party. Thus, broadcasters should be asking for certifications from their program producers that they have not received anything of value in exchange for featuring a product or service or, if they have, that it is disclosed. As we wrote last year, one television broadcaster was fined when an on-air host who produced his own show was found to have received consideration for the point of view that he expressed – something not revealed in his program, and something that the station did not inquire about.

Broadcasters, whether radio or TV, should use care when accepting anything of value in exchange for agreeing to broadcast any material on the air – whether it be music or news or any other type of programming. We wrote about some of the considerations that stations should use in connection with payola concerns, which is really another aspect of the same issue. With the FCC’s scrutiny on this area, stations need to err on the side of caution, and be sure to identify sponsored programming whenever it appears.

David Oxenford represents broadcasting and digital media companies in connection with regulatory, transactional and intellectual property issues. He has represented broadcasters and webcasters before the…

David Oxenford represents broadcasting and digital media companies in connection with regulatory, transactional and intellectual property issues. He has represented broadcasters and webcasters before the Federal Communications Commission, the Copyright Royalty Board, courts and other government agencies for over 30 years.

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David is a partner at the law firm of Wilkinson Barker Knauer LLP, practicing out of its Washington, DC office. He has represented broadcasters for over 30 years on a wide array of matters from the negotiation and structuring of station purchase and sale agreements to regulatory matters. His regulatory expertise includes all areas of broadcast law including the FCC’s multiple ownership limitations, the political broadcasting rules, EEO policy, advertising issues, and other programming matters and FCC technical rules.